KOTA KINABALU - Malaysia and the Philippines will set up a joint taskforce to track down those responsible for the beheading of Malaysian hostage Bernard Then by militants in the Philippines, the New Straits Times reported on Thursday (Nov 19), as more details emerged of the circumstances surrounding his death this week.

The New Straits Times newspaper in an online report published Thursday cited the Inspector-General of Police Tan Sri Khalid Abu Bakar as saying that he would be heading to Manila to personally oversee discussions on bringing those responsible to justice.

The meeting would also focus on how to prevent similar threats of kidnap-for-ransom cases by the Abu Sayyaf militant group from happening in the future.

Meanwhile, The Star reported on Thursday that negotiators working to secure Then's release were caught off guard when the Abu Sayyaf upped its ransom demand.

The initial agreement for the release of the 39-year-old Sarawakian, along with restaurant manager Thien Yoke Fun, 50, was for 30 million pesos (S$903,000), but the amount then shot up to 80 million pesos (S$2.4 million).

The Malaysian engineer was beheaded at around 4pm on Tuesday (Nov 17) at a remote Abu Sayyaf stronghold in Jolo island, in Sulu province, some 1,400km south of the capital Manila.

The Star reported Jolo-based anti-kidnapping activist, Professor Octavio Dinampo, as saying that Abu Sayyaf leader Indang Susukan, who was holding the victims, had agreed on the lower sum.

But closer to the exchange, an uncle of Susukan came into the picture and demanded more money.

Refusing to budge, the Abu Sayyaf released only Ms Thien on Nov 8 as they received only 30 million pesos.

The gunmen also gave the negotiators a week to come up with the rest of the ransom, said Prof Octavio, who has knowledge of the negotiations.

He said there were at least two teams of Filipino and Malaysian negotiators.

"I believe that when it became clear to the Abu Sayyaf that no additional money was coming, they killed Then," Prof Octavio said.

He does not believe that a Philippine military offensive against the Abu Sayyaf a few hours before Mr Then was killed was the reason for the engineer's murder.

"The offensive has been going on for more than a year," he said, adding that Mr Then's physical condition could not have been a factor either.

The hostage had reportedly sustained leg wounds that made it difficult for him to move, a liability for the gunmen who had to move quickly to avoid government patrols.

It had also been reported that Mr Then had lost his spectacles, making it hard for him to see properly.

According to other sources in Jolo, the Abu Sayyaf had raised the ransom demand to 370 million pesos, making the situation impossible for the negotiators.

Other sources reported that the gunmen killed Mr Then when they became upset after some of the ransom money they got for Ms Thien was hijacked by other militant groups.

Prof Octavio said the sack with Mr Then's severed head was thrown into Jolo town, a sign from the Abu Sayyaf that they took the non-payment of the ransom seriously.

"They have done this before and it is a message that no one should play around with them," he said.

A former Abu Sayyaf kidnap victim himself, the activist has grassroots sources on the ground to feed him information.

In a statement on Wednesday, Sabah Chief Minister Musa Aman said: "We tried our best to negotiate his release but unfortunately it did not materialise."

Mr Then and Ms Thien were kidnapped from the Ocean King seafood restaurant in Sandakan on May 14.

"We extend our deepest condolences to the family of Mr Then. The perpetrators must be brought to justice. The international community must continue to work closely together in countering terrorism," an MFA spokesman said.

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